U.S. unemployment benefit applications saw a significant increase last week, reaching their highest figures in two months, though they remain relatively low compared to historical norms.
The latest data from the Labor Department indicated that jobless claims rose by 17,000 to a total of 242,000 for the week ending December 7. This figure is notably higher than the 220,000 that analysts had projected, reinforcing the trend of a cooling labor market.
In addition, the report revealed that continued claims, which track the total number of individuals receiving unemployment benefits, increased by 15,000, bringing the count to 1.89 million for the week that ended on November 30.
The four-week moving average of weekly claims, which helps to smooth out short-term fluctuations, also rose by almost 6,000, reaching 224,250.
Jobless benefit applications are often viewed as an indicator of layoffs across the U.S.
Despite the emerging weaknesses in the job market, it remains relatively robust, defying many economists’ expectations in light of the sustained high-interest rates in recent years. The Federal Reserve had implemented a series of rate hikes in 2022 and into 2023 in an effort to curb the inflation rate, which reached a four-decade peak as the economy bounced back from a sharp but brief pandemic-induced recession.
Recently, the Fed has lowered its key interest rate during its last two meetings, as inflation has been easing, dropping close to the central bank’s 2% target from a high of over 9%. Many expect another rate reduction to occur in the Fed’s upcoming meeting at the end of 2024.
In other labor market news, the government reported a rise in job openings to 7.7 million in October, up from a 3.5-year low of 7.4 million in September, indicating that employers are still actively looking to hire, even in the face of dwindling hiring rates.
In November, U.S. businesses added a robust 227,000 jobs, recovering from a stark decline of only 36,000 jobs in October, which was attributed to labor strikes and hurricane impacts that significantly affected employment numbers. Additionally, the government has adjusted its previous job growth estimates for September and October upwards by a combined total of 56,000 jobs.
